I’ve seen a nice little two-bedroomed flat just near where I live.
The good points:
• It is near the university
• You can easily walk into town form there
• It is first floor
• Reasonable decorative order
• Good size
• Vacant possession
• Allocated parking
The bad points:
• Furniture and carpets are ugly
• It is very near university accommodation with possible noise problems
• Parking is not secure
The deal:
• The property could be valued at £124,000 – some similar nearby are less, some more.
• I would be happy to offer £102,000 AND GET A MORTGAGE FOR £104,500. Neat little trick – I’ll tell you about it sometime. That would be £22,000 under “purchase price”.
• The mortgage I’d look for would be 85% loan to value, 4.99% interest, interest only, 12 year term.
• The mortgage lender would want 130% rental cover, based on the 4.99%.
• Expected rent: £575 pcm.
• Total fees would be £1620.
• Total monthly expenses, including Letting Agent’s fee, ground rent, maintenance, service charge £128.75
Well, does it stack up?
Wednesday, 30 January 2008
Friday, 25 January 2008
The Good News and the Bad News – Property Management Issues
Bad news: My tenants in my house in Islington have come up with a list of things which need doing.
• The bath needs resealing. There has been a leak form the bath on to the ceiling below. Surely they should have noticed this before it got to that stage?
• There are window keys missing. They were all there before the property was rented out, and this has come up before. Reluctantly I agreed to get them supplied at that time. Or were they never supplied? They haven’t lost them again, have they?
• The seal on the freezer has gone. I wonder whether they have not been defrosting it? On the other hand, it owes us nothing. It is six years old, and you do just have to accept that tenants, especially those sharing, do create a lot of wear and tear.
The Good News: I don’t have to do anything, I just authorise my Lettings Agent to get it all fixed. They often will for a very good price and even if the price is not so good, at least I don’t have to travel up to London to do this. That saves me time, and time is money.
Other Good News: My tenants in the flat in Streatham have accepted a rent increase.
Those are the ups and downs of being a landlord.
• The bath needs resealing. There has been a leak form the bath on to the ceiling below. Surely they should have noticed this before it got to that stage?
• There are window keys missing. They were all there before the property was rented out, and this has come up before. Reluctantly I agreed to get them supplied at that time. Or were they never supplied? They haven’t lost them again, have they?
• The seal on the freezer has gone. I wonder whether they have not been defrosting it? On the other hand, it owes us nothing. It is six years old, and you do just have to accept that tenants, especially those sharing, do create a lot of wear and tear.
The Good News: I don’t have to do anything, I just authorise my Lettings Agent to get it all fixed. They often will for a very good price and even if the price is not so good, at least I don’t have to travel up to London to do this. That saves me time, and time is money.
Other Good News: My tenants in the flat in Streatham have accepted a rent increase.
Those are the ups and downs of being a landlord.
Monday, 21 January 2008
Fluid populations
I am currently living in a pleasant little flat for which I pay rent. My husband may well be doing the same thing in either Plymouth or Swansea in a few weeks’ time.
My flat is a Grade II listed building – a former hospital. The hospital is replaced by a huge modern teaching hospital about five miles away.
There are two things I particularly like about this building: I can walk to work. There is a secure, gated car park. In fact, the whole building is very secure.
At first glimpse, you might think that the building was only half occupied. In fact, it probably is only half full at any on time. There’s a parade of suitcases going backwards and forwards most days. There are few people my age living here – though there is a near-retirement age couple in a flat near to mine. Most of the occupants are quite young. Some are young professionals who are not yet on the property ladder themselves. There are some postgraduate students, some mature but still young students. I know of at least one other university worker who has a proper family home elsewhere, just as I do.
Every city in the UK is building masses of one and two bedroom units near to the centres. (I can walk to the middle of Manchester form mine in fifteen minutes. I am in the middle of Salford.) This is to fall in line with government predictions for housing. They seem to remain mysteriously empty for long periods of time. Yet this is deceptive. When I first started looking in this area, there seemed to be lots for rent. But in fact they were renting very quickly. If you hesitated, the flats were gone. They do empty again just as quickly. People have portfolio careers, particularly those under forty. Those over forty often work away from home, but the homemaker, the child rearer will stay in one place.
In summary, we do need these small units because:
• People have portfolio careers these days
• Highly skilled specialized people have to go to where the work is
• Families are smaller and many young people are opting not to have children
• Divorce is easier
• We are becoming more insular
• Young people cannot get on the property ladder.
On the whole, these new places are well designed, look good and are comfortable.
My flat is a Grade II listed building – a former hospital. The hospital is replaced by a huge modern teaching hospital about five miles away.
There are two things I particularly like about this building: I can walk to work. There is a secure, gated car park. In fact, the whole building is very secure.
At first glimpse, you might think that the building was only half occupied. In fact, it probably is only half full at any on time. There’s a parade of suitcases going backwards and forwards most days. There are few people my age living here – though there is a near-retirement age couple in a flat near to mine. Most of the occupants are quite young. Some are young professionals who are not yet on the property ladder themselves. There are some postgraduate students, some mature but still young students. I know of at least one other university worker who has a proper family home elsewhere, just as I do.
Every city in the UK is building masses of one and two bedroom units near to the centres. (I can walk to the middle of Manchester form mine in fifteen minutes. I am in the middle of Salford.) This is to fall in line with government predictions for housing. They seem to remain mysteriously empty for long periods of time. Yet this is deceptive. When I first started looking in this area, there seemed to be lots for rent. But in fact they were renting very quickly. If you hesitated, the flats were gone. They do empty again just as quickly. People have portfolio careers, particularly those under forty. Those over forty often work away from home, but the homemaker, the child rearer will stay in one place.
In summary, we do need these small units because:
• People have portfolio careers these days
• Highly skilled specialized people have to go to where the work is
• Families are smaller and many young people are opting not to have children
• Divorce is easier
• We are becoming more insular
• Young people cannot get on the property ladder.
On the whole, these new places are well designed, look good and are comfortable.
Tuesday, 15 January 2008
Paperwork
There is a lot of paperwork involved in property investment, especially at the point that you apply for a new mortgage. It’s wise to stream-line this as much as possible.
When you deal with a new mortgage broker, or a new solicitor, they will want proof of residence and identity. Your latest bank statement or utility bill should be to hand. I tend to use credit card bills. You do have to send the originals and it’s easier to do without your credit card bill than a bank statement. I personally never do without my passport or my driving license. They can keep hold of these for up to a fortnight. Who knows when you might get that sudden invite to go abroad and you might want to hire a car too? And you may get another request to see your identity in the meantime. The trick is to find a tame local solicitor who will certify a copy of your passport. Store one on your computer and you can print it out when needed. Solicitors usually charge about £5.00 for this. I find it worth it.
Keep your mortgage statements handy also. They often want to see these. I usually provide a copy rather. If you work through a broker, they are going to copy them anyway. And, as above, you may suddenly need them again. Don’t offer them unless they ask for them.
Many Buy-to-Let mortgages are self-certifying so you don’t have to prove income and in any case, there are plenty of Buy-to-Let mortgages around where you don’t need an income. Just occassionally you do, so have your payslips handy too.
The real nightmare is if they want to see tenancy agreements. These are usuaIly upwards of six pages. I find it a good idea to photocopy these as soon as they arrive and store the photocopies. You can then have a set ready quickly.
And of course, all of this implies you need a photocopier at home. I bought one in 1994 for £600. It has only just given up the ghost. It was a godsend. They’re now relatively cheaper and more efficient.
This is the down side, that bit that you hate of the job you love. So make it as simple as possible.
When you deal with a new mortgage broker, or a new solicitor, they will want proof of residence and identity. Your latest bank statement or utility bill should be to hand. I tend to use credit card bills. You do have to send the originals and it’s easier to do without your credit card bill than a bank statement. I personally never do without my passport or my driving license. They can keep hold of these for up to a fortnight. Who knows when you might get that sudden invite to go abroad and you might want to hire a car too? And you may get another request to see your identity in the meantime. The trick is to find a tame local solicitor who will certify a copy of your passport. Store one on your computer and you can print it out when needed. Solicitors usually charge about £5.00 for this. I find it worth it.
Keep your mortgage statements handy also. They often want to see these. I usually provide a copy rather. If you work through a broker, they are going to copy them anyway. And, as above, you may suddenly need them again. Don’t offer them unless they ask for them.
Many Buy-to-Let mortgages are self-certifying so you don’t have to prove income and in any case, there are plenty of Buy-to-Let mortgages around where you don’t need an income. Just occassionally you do, so have your payslips handy too.
The real nightmare is if they want to see tenancy agreements. These are usuaIly upwards of six pages. I find it a good idea to photocopy these as soon as they arrive and store the photocopies. You can then have a set ready quickly.
And of course, all of this implies you need a photocopier at home. I bought one in 1994 for £600. It has only just given up the ghost. It was a godsend. They’re now relatively cheaper and more efficient.
This is the down side, that bit that you hate of the job you love. So make it as simple as possible.
Thursday, 10 January 2008
The Positiva Property Group
I don’t know quite where Caroline Edwards found the name for her property company, but it is certainly very apt. Doing business with the Positiva Property Group is a very positive experience. Caroline and her team deal with property in Spain, including sales, rental, finance, management and inspection tours. They currently operate in the Alicante, Almeria, Granada and Murcia regions and also have connections to the show-case Polaris World sites.
Of course, there are many companies who do precisely this type of business, but Positiva is an independent group and you get the personal touch. I first met Caroline when I was looking for property in the Almeria area. She has since sourced and helped me find the finance for a second small property almost right on Vera Playa. A complete no-brainer. A few weeks’ rent has covered the mortgage.
Another plus of working with this company is their extensive knowledge of the area – not just in terms of property but also about where the best beaches are, where to shop, where to eat and indeed to find anything you require.
Of course, there are many companies who do precisely this type of business, but Positiva is an independent group and you get the personal touch. I first met Caroline when I was looking for property in the Almeria area. She has since sourced and helped me find the finance for a second small property almost right on Vera Playa. A complete no-brainer. A few weeks’ rent has covered the mortgage.
Another plus of working with this company is their extensive knowledge of the area – not just in terms of property but also about where the best beaches are, where to shop, where to eat and indeed to find anything you require.
Saturday, 5 January 2008
To Raise Rent or Not to Raise Rent?
Our tenants should, I think, expect rent to go up from time to time. Our costs do, and inflation does exist. I’m quite pleased that the house I own in Islingtopn let very quickly this time last year, even though this is just about the worst time for finding new tenants. And they accepted the full suggested price.
Well, it’s renewal time now. My agents did suggest a rent rise. So, I went by their advice and asked for a £50 per month increase. The rent is currently £1300 pcm. The tenants have come back and said that one wants to move out, but they have found someone to replace them. And could they keep the rent the same as it was? I asked the agents what they thought. One of them – and this particular one always seems to me to be a little anti-landlord – said it would be good to go with what the tenants want. I suspect his colleague may have suggested differently. The less senior colleague I spoke to wasn’t really very forthcoming. I did suggest that we built into the contract that the rent will go up by inflation rate next year. That may be beyond the normal procedures of this particular agent.
It is a difficult question. Why punish those who have been good tenants by putting up the rent? On the other hand, there are those extra costs to consider and would one really lose them for the sale of an extra £50 per month between three of them, when to move they would have all the problems of getting their deposit back, finding a new place and a deposit for that? Especially given that the new place will probably be as expensive, at least, as the one they’re leaving?
Well, it’s renewal time now. My agents did suggest a rent rise. So, I went by their advice and asked for a £50 per month increase. The rent is currently £1300 pcm. The tenants have come back and said that one wants to move out, but they have found someone to replace them. And could they keep the rent the same as it was? I asked the agents what they thought. One of them – and this particular one always seems to me to be a little anti-landlord – said it would be good to go with what the tenants want. I suspect his colleague may have suggested differently. The less senior colleague I spoke to wasn’t really very forthcoming. I did suggest that we built into the contract that the rent will go up by inflation rate next year. That may be beyond the normal procedures of this particular agent.
It is a difficult question. Why punish those who have been good tenants by putting up the rent? On the other hand, there are those extra costs to consider and would one really lose them for the sale of an extra £50 per month between three of them, when to move they would have all the problems of getting their deposit back, finding a new place and a deposit for that? Especially given that the new place will probably be as expensive, at least, as the one they’re leaving?
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